This is the process of how I built my first homelab server for under AUD $60, what I planned to do with it and what I learned along the way.
The Story
One night, I was casually browsing eBay with no intention of buying anything. I came across an HP ProDesk 400 G2 SFF listed for $60.
I knew this machine was never designed to be a server. It is a small office desktop built for basic work, not 24/7 uptime. But for $60, it felt like the perfect machine to experiment on without worrying about damaging expensive hardware. I grabbed it immediately.
The Plan
Before it even arrive my house, I had a rough idea of what I wanted this server to do. Nothing fancy, just practical services I could actually use.
My goals were:
- Store files and backups
- Run a network-wide ad blocker
- Run Docker containers
- Experiment with light AI models
I also wanted this server to force me to learn Linux server, networking, and system administration properly instead of relying on theory alone.
Hardware and Upgrades
The base specs were simple:
- HP ProDesk 400 G2 SFF
- Intel i5-4590
- 4GB RAM
- 1TB HDD
The first upgrade I made was adding a used 128GB SSD from my old laptop as a boot drive. This alone made a huge difference. Boot times were faster, updates installed quicker, and the system felt far more responsive.
The original 1TB hard drive stayed in the system and was used for file storage.
Choosing an Operating System
At first, I planned to run Proxmox. It is popular in the homelab community and seemed like the “correct” choice but I realised it’s not begginer friendly.
Instead, I installed a Ubuntu Server 24.04 LTS and run CasaOS on it. This kept resource usage low and made the system much simpler to manage.
The Setup
Since I didn’t want to keep a monitor and keyboard attached to a $40 PC sitting in the corner, my first priority was making it completely autonomous and remotely accessible.
Networking & Remote Access I needed to manage the server from my main laptop without it constantly “moving” around the network. I set a static IP on my router and enabled SSH immediately.
Headless Setup Because this machine lives headless (no display), I had to ensure it could recover on its own if the power flickered. I tweaked the bootloader to skip graphical checks and set up an automated login. Now, when I hit the power button, it’s ready to accept commands instantly without waiting for a user to sign in physically.
CasaOS integration I installed CasaOS to give the server a friendly, visual dashboard making it easy to manage Docker containers and check system status at a glance.
Storage & Sharing To make use of that 1TB drive, I set up Samba for file sharing. The tricky part was configuring it to play nice with both my Windows gaming PC and my Apple devices. After some tweaking, I have a reliable network share that works seamlessly across different operating systems for backups and media.
Ad-Blocking I used Pi-hole to act as a network-wide ad blocker. It has significantly cleaned up and blocked most of the ads especially on Netflix that I access on my phone and TV without needing browser extensions.
Local AI Experiments This was the most fun part. I’m using Belullama, a very good app that bundles Ollama and OpenWebUI together. This gives me a clean, ChatGPT-like interface. It allows me to easily download and test different models right from the browser.
I’ve documented every command, config file I used. You can find the full technical breakdown here:
Detailed Setup Guide on GitHub
Power Efficiency
One of my main concerns was how much this would cost to run 24/7. Surprisingly, the machine is incredibly efficient. It averages a power draw of just 22W, which totals around 15 kWh per month. At current rates, that adds only about ~AUD $4.60 to my monthly electricity bill. Considering the utility it provides, I’d say it’s worth every penny.
I use Meross smart plug to monitor energy consumption.
Final Thoughts
This server isn’t a powerhouse. It’s not going to win any benchmark competitions, and it certainly isn’t built for enterprise-grade workloads but it works. It just sits quietly in the corner blocking ads, backing up my files, and running my services without complaint.
If you have been thinking about starting a homelab, don’t wait for the “perfect” gear. Just start. You will learn infinitely more by building than you ever will by just reading about it.